Restore Australia gave the money to print anti-mosque material. It is a not-for-profit group run by former One Nation candidate Mike Holt, a Vietnam veteran and author, and Charles Mollison, a former lieutenant-colonel who also served in Vietnam. Both men live on the Sunshine Coast.

Mr Holt confirmed the amount - which had been donated to Restore Australia - was given to a group called Stop the Mosque in Bendigo and also to a Victorian chapter of the Patriot Defence League Australia.

Stop the Mosque in Bendigo runs an active anti-Islam Facebook page from Bendigo and Beaufort, near Ballarat. The administrators, Julie Kendall and Monika Evers, did not return calls.

Patriot Defence League Australia - with a fierce anti-Islam agenda - has chapters in most states. Victorian members attended Bendigo council meetings about the mosque wearing T-shirts bearing the group's insignia.

Mr Holt said Stop the Mosque in Bendigo and the PDLA were ''our foot soldiers on the ground''.

''We are not right-wing crazies,'' he said. ''We are ordinary Australians opposed to the Islamisation of our country.''

The PDLA emerged this week as the group most likely to have tied black balloons on Bendigo buildings and homes, including that of pro-mosque City of Greater Bendigo councillor Mark Weragoda.

A Ballarat spokesman for the group did not deny involvement, but when pressed said: ''No comment.''

Restore Australia also administers a subgroup called Islam4Infidels, which issues written advice for people or communities wanting to campaign against mosques.

Mr Holt said Restore Australia shared material and ideology with two groups in Britain - the English Defence League, known for anti-Islamic street protests, and Liberty Great Britain, a new far-right political party.

He said the Bendigo mosque issue had brought previously separate Australian anti-Islam groups together. ''We were not united before. But this issue has managed to unite us.''

A planning application for the mosque was passed by a majority of Bendigo councillors last week, but Restore Australia has paid for a Sydney lawyer often used in anti-mosque hearings, Robert Balzola, to appeal to the Victorian Civil and Administrative Tribunal on planning grounds.

Local objectors say the mosque would breach regulations concerning parking, noise and traffic.

If built, the Australian Islamic Mission's $3 million mosque will feature two floors, a cafe and sports hall on vacant land in the east of the city.